Correlation Between Sp 500 and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Sp 500 and Franklin Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sp 500 and Franklin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp 500 Equal and Franklin Gold Precious, you can compare the effects of market volatilities on Sp 500 and Franklin Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sp 500 with a short position of Franklin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp 500 and Franklin Gold.
Diversification Opportunities for Sp 500 and Franklin Gold
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INDEX and Franklin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sp 500 Equal and Franklin Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold Precious and Sp 500 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sp 500 Equal are associated (or correlated) with Franklin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Gold Precious has no effect on the direction of Sp 500 i.e., Sp 500 and Franklin Gold go up and down completely randomly.
Pair Corralation between Sp 500 and Franklin Gold
Assuming the 90 days horizon Sp 500 Equal is expected to generate 0.36 times more return on investment than Franklin Gold. However, Sp 500 Equal is 2.81 times less risky than Franklin Gold. It trades about 0.36 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about -0.2 per unit of risk. If you would invest 5,446 in Sp 500 Equal on September 1, 2024 and sell it today you would earn a total of 317.00 from holding Sp 500 Equal or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sp 500 Equal vs. Franklin Gold Precious
Performance |
| Timeline |
| Sp 500 Equal |
| Franklin Gold Precious |
Sp 500 and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp 500 and Franklin Gold
The main advantage of trading using opposite Sp 500 and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp 500 position performs unexpectedly, Franklin Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Gold will offset losses from the drop in Franklin Gold's long position.| Sp 500 vs. Dana Large Cap | Sp 500 vs. Qs Large Cap | Sp 500 vs. Fidelity Series 1000 | Sp 500 vs. Dunham Large Cap |
| Franklin Gold vs. Franklin Emerging Market | Franklin Gold vs. Transamerica Emerging Markets | Franklin Gold vs. Eagle Mlp Strategy | Franklin Gold vs. Goldman Sachs Emerging |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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